Employers are offering more financial wellbeing programs to help alleviate financial stress, particularly for younger employees, and their organizations are seeing positive returns as a result. This was the conclusion of a new financial wellbeing and voluntary benefits survey released by Buck, an integrated HR and benefits consulting, technology, and administration services firm.
The findings indicate that “financial stress” is a top motivator for organizations investing in financial wellbeing programs and 40% of employers say “addressing financial stress” is a top reason for increasing voluntary benefit promotion; this compares with only 16% of companies in 2017, when Buck completed a similar survey.
Buck also found that financial wellbeing is critical to promoting job satisfaction, loyalty, productivity, and engagement. According to the survey, 87% of employers believe investing in employee financial wellbeing will influence job satisfaction. In addition, 80% of respondents see direct savings resulting from voluntary benefits through employee attraction and retention, behavior change, and increased participation in cost-favorable plans.
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The survey was conducted from late 2019 to February 2020, and responses were collected from 164 leading U.S. firms representing more than 3.6 million U.S. employees across a broad range of industries.
“Even before the COVID-19 pandemic hit, companies were deeply aware of the financial stress many Americans struggle with every day,” said Tom Kelly, Principal and Voluntary Benefits Leader in Buck’s Health practice. “Hourly and millennial workers are seen to be most in need, and we’re seeing a renewed focus on voluntary benefits as a way to move employees from financial instability to stability and ultimately to enhanced financial peace of mind.”
Survey insights:
- Helping employees meet short-term needs is a top priority. Only 38% of respondents listed “retire when ready” as their top financial wellbeing priority. Rather, the focus has shifted to helping employees meet short-term financial obligations, such as budgeting and saving (68%), credit card debt (66%), and unexpected medical expenses (59%).
- Employers are looking to expand benefit programs. The survey shows that even before the onset of COVID-19, 63% of employers were looking into adding benefits that support emerging employee needs such as student loan debt or unexpected medical expenses. The top new benefits companies plan to add include student loan guidance and refinancing (20%), student loan repayment (18%), hospital indemnity (13%), and long-term care (11%).
- For budget-squeezed Americans, benefits take on increased importance. 91% of respondents indicated that voluntary benefits are an important part of a financial wellbeing strategy. Employers offer, on average, 10 programs that range from helping employees address unexpected expenses, debt, and paycheck-to-paycheck issues to legal services.
- Focus on millennials. According to the survey, 40% of employers say millennials, now the largest generation in the workforce, are top targets for financial support. Many are saddled with student loans, consumer debt, and a lack of savings – both for emergencies and for retirement.
“Financial wellbeing is clearly a top priority for employers,” said Brian Stitzel, U.S. Health Practice Leader for Buck. “Now, as we navigate the impact of COVID-19 on the U.S. economy, it’s even more critical. Workers who’ve had wages reduced, been furloughed, or re-hired after a period of unemployment, may need extra support. And employers recognize that using voluntary benefits to help meet these employee needs can benefit their organization by lowering costs and increasing loyalty.”
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